THE IMPACT OF CURRENCY PHASE-OUT ON THE UNBANKED AND UNDERBANKED POPULATION
Currency phase-out is the process of phasing out a particular version of currency and replacing it with a new one which can have a significant impact on the unbanked and underbanked population. These groups who do not have access to traditional banking services may be disproportionately affected by the transition.
One of the biggest challenges for the unbanked and underbanked during a currency phase-out is access to the new currency. Without a bank account, they may not have a way to exchange their old currency for the new one. This could lead to a situation where they are left with worthless old currency, unable to participate in the economy.
Another challenge for the unbanked and underbanked during a currency phase-out is the ability to understand and navigate the new currency system. Without access to financial education and resources, they may struggle to understand how the new currency works and how to use it. This can lead to confusion and mistrust of the new currency, making it difficult for them to take part in their day-to-day economical activities.
To mitigate these impacts, the government and the Central Bank of Nigeria must take steps to ensure that the unbanked and underbanked population is not left behind during a currency phaseout. This can include providing access to the new currency through non-traditional channels, such as mobile payments and digital wallets. It also means providing financial education and resources to help the unbanked and underbanked understand and navigate the new currency system.
Additionally, the government and the Central Bank of Nigeria can work with community organizations, non-profits, and other groups that serve the affected population to ensure that they are included in the currency phase-out process. This can include providing accessible locations for currency exchange and working with informal economy workers to ensure they have access to the new currency.
Currency phaseout can have a significant impact on the unbanked and underbanked population. To ensure that they are not left behind, the government and the Central Bank of Nigeria must take steps to provide access to the new currency, and financial education and work with community organizations to ensure that the unbanked and underbanked population is included in the process.